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The Justice Department and SEC release a Guide to the Foreign Corrupt Policies Act – Don’t Wait Until It’s Too Late to Comply
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The Justice Department and SEC release a Guide to the Foreign Corrupt Policies Act – Don’t Wait Until It’s Too Late to Comply

The Foreign Corrupt Practices Act of 1977 (FCPA), prohibits the payment of bribes or other corrupt payments to foreign officials for the purpose of obtaining or keeping business.   Since payments to foreign officials can’t be discovered or scrutinized without adequate accounting records, the FCPA also requires companies to keep accurate books and records and to devise and maintain an adequate system of internal accounting controls.  The FCPA specifically prohibits an individual or business from knowingly falsifying books and records or from knowingly circumventing or failing to implement a system of internal controls.

The point, of course, is to level the playing field among law-abiding companies, deter money laundering, and ensure tax collection.  Violations can lead to civil and criminal penalties, sanctions and remedies, including fines, disgorgement, and/or imprisonment.

A long-standing complaint from the business sector is that the FCPA is cumbersome, unwieldy, and disjointed.  In response, the Justice Department and the SEC joined forces to develop a guide to the FCPA.  Released in November 2012, A Resource Guide to the U.S. Foreign Corrupt Practices Act is the Justice Department and the SEC’s “detailed compilation of information about the FCPA, its provisions, and enforcement.”

According to Justice, the guide is intended to “provide helpful information to enterprises of all shapes and sizes – from small businesses doing their first transactions abroad to multi-national corporations with subsidiaries around the world.”

Some of the topics addressed in the guide include:

  • Who and what is covered by the FCPA’s anti-bribery      and accounting provisions;
  • The definition of a “foreign official” for FCPA      compliance purposes;
  • What are proper and improper gifts, travel and      entertainment expenses;
  • The nature of facilitating payments;
  • How successor liability applies in the mergers and      acquisitions context;
  • The hallmarks of an effective corporate compliance      program; and
  • The different types of civil and criminal      resolutions available in the FCPA context.

As to these topics and others, the guide details the statutory requirements and provides insight into DOJ and SEC enforcement practices through hypotheticals, examples of enforcement actions and declinations, and summaries of applicable case law and DOJ opinion releases.

FCPA compliance is not optional, and the Justice Department and SEC have made it clear every company is expected to establish and run an adequate FCPA compliance program. From the government’s point of view, if a U.S. company is doing business outside the U.S., it is obligated do that business in compliance with the FCPA.

Before doing business in the global marketplace, be sure you understand the FCPA and have procedures in place to ensure compliance.  The attorneys at Glass & Goldberg provide high quality, cost-effective legal services and advice for clients in all aspects of business litigation and transactional law.  Call us at (818) 888-2220, email us at info@glassgoldberg.com, or visit us on the web at www.glassgoldberg.com to learn more about the firm and to sign up for future newsletters.

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